Post Reply
161-180 of 6990
OCBC keeps 2025 guidance, but loan growth targets could be buffeted by headwinds: CEO Helen Wong
US tariffs impact around 3% of loan book
[SINGAPORE] OCBC is keeping its financial targets for 2025, but noted that its loan growth guidance of a mid-single digit will likely see the most headwinds, especially if the market continues to be &ldquo very uncertain&rdquo , said chief executive officer Helen Wong.
Nevertheless, current trade tariffs are expected to have a &ldquo first-order impact&rdquo on 3 per cent of OCBC&rsquo s loan book, with stress tests showing that its portfolio remains resilient, Wong said.
&ldquo Refinancing is always there, and we do think that there will be some flight to quality&hellip (But if) economic growth is lower, of course, loan growth will be lower as well,&rdquo she said at the briefing for the lender&rsquo s first quarter 2025 results on Friday (May 9).
The lender is still planning for three rate cuts this year, Wong said, noting that its March exit NIM was 2.03 per cent.
She also noted that the lender has cut some of its deposit pricing &ndash it cut interest rates on its flagship 360 deposit account, for instance &ndash which should help manage its funding costs, she added.
As for its costs, it plans to achieve a cost-to-income ratio in the low 40 per cent range, while credit costs are to be in the range of 20 to 25 basis points.
The lender took a &ldquo prudent approach&rdquo to set aside additional preemptive allowances in view of the current macroeconomic uncertainties and heightened geopolitical tensions.
Total allowances grew 2 per cent on quarter to S$212 million, comprising S$94 million in allowances for impaired assets and S$118 million in allowances for non-impaired assets.
China, Asean strong trading ties
Responding to questions about shift in trade flows, Wong noted that the China plus one strategy has been happening for many years &ndash trade tension between the US and China dates as far back as 2015.
In fact, Chinese corporates are diversifying into more than one market, and they are already expanding beyond manufacturing to target Asean markets &ndash resulting in Asean and China becoming each other&rsquo s largest trading partners over the years.
It is also not easy to shift manufacturing abilities in a short period of time, hence corporates are unlikely to react strongly to immediate tariff impact.
&ldquo What most bigger corporates have done is prepare for the future, so having a diversified manufacturing phase is important, but where you source your materials is also important,&rdquo the CEO said.
Supply chains will be easier to shift, but will also unlikely happen in a day or a quarter, for example.
&ldquo For any good business, if they do plan correctly, they always have options which will make them switch from time to time,&rdquo she said.
Q1 results beat
Net profit for the three months ended Mar 31, 2025, stood at S$1.88 billion, compared with S$1.98 billion from the year-ago period, narrowly beating the S$1.86 billion consensus forecast in a Bloomberg survey of five analysts.
Net interest income for the quarter fell 4 per cent to S$2.35 billion, due to a falling interest rate environment. NIM was down to 2.04 per cent for the quarter, from 2.27 per cent in the previous corresponding period.
Non-interest income was up 10 per cent to S$1.31 billion, on stronger fees, trading and insurance income.
The bank&rsquo s non-performing loans ratio was 0.9 per cent, down from 1 per cent in the same period a year ago.
Operating expenses rose 5 per cent from the same period a year ago to S$1.42 billion, driven by higher staff costs from annual salary adjustments and volume-related compensation, as well as &ldquo continued investments in technology&rdquo .
Direct impact of trade tariffs affects about 3% of OCBC&rsquo s loan book portfolio remains &lsquo resilient&rsquo
The bank&rsquo s customer loans stand at S$322 billion as at Mar 31, 2025, up 7% from S$301 billion a year ago
[SINGAPORE] Current trade tariffs are expected to have a &ldquo first-order impact&rdquo on 3 per cent of OCBC&rsquo s loan book, group chief financial officer Goh Chin Yee said at the bank&rsquo s first-quarter earnings call on Friday (May 9).
&ldquo We further stress-tested our portfolio for potential vulnerabilities and assessed that our portfolio remains resilient,&rdquo Goh said.
OCBC&rsquo s customer loans stood at S$322 billion as at Mar 31, 2025, up 7 per cent from S$301 billion a year ago.
Customer sectors currently facing tariff impacts include manufacturing and goods production, excluding certain industries such as pharmaceuticals and semiconductors that have been exempted, OCBC group chief executive officer Helen Wong said.
Other directly affected industries include international transport, storage of goods, raw materials, and commodities.
&ldquo These are very subject to the tariff impact, (and) so we say that together, this is about 3 per cent of our loan book,&rdquo Wong said.
The &ldquo second category&rdquo of impact would affect wholesale traders and industries like pharmaceuticals if they come under tariffs, she added. The &ldquo third category&rdquo would be clients with a domestic focus, who would be less exposed.
Said Wong: &ldquo Yes, maybe the supply chain (will) be impacted, but those who are very much focused on domestic (sales) also mainly source domestically as well.&rdquo
These include customers in the services and utilities sectors, local construction, real estate and data centre players, as well as financial intermediaries.
Markets can' t ignore election of new Pope
https://www.pwmnet.com/markets-cant-ignore-election-of-new-pope
Closing gap at 16.54 ?
Delvyss ( Date: 09-May-2025 10:18) Posted:
|
A " stay invested" strategy for banks :)
OCBC Q1 profit falls 5% to S$1.88 billion beats expectations
This beats the S$1.86 billion consensus forecast in a Bloomberg survey
[SINGAPORE] OCBC&rsquo s : O39 -0.06% net profit for the first quarter fell on lower net interest income and higher operating expenses.
Net profit for the three months ended Mar 31, 2025, stood at S$1.88 billion, compared with S$1.98 billion from the year-ago period, it said on Friday (May 9).
The earnings were 12 per cent up from Q4&rsquo s S$1.69 billion and beat the S$1.86 billion consensus forecast in a Bloomberg survey of five analysts.
It was the last of Singapore&rsquo s three lenders &ndash together with UOB and DBS &ndash to release its quarterly results this season.
Net interest income for the quarter fell 4 per cent to S$2.35 billion, due to a falling interest rate environment. Net interest margin was down 23 basis points to 2.04 per cent for the quarter, from 2.27 per cent in the previous corresponding period.
Non-interest income was up 10 per cent to S$1.31 billion, on stronger fees, trading and insurance income.
The bank&rsquo s non-performing loans ratio was 0.9 per cent, down from 1 per cent in the same period a year ago.
Operating expenses rose 5 per cent from the same period a year ago to S$1.42 billion, driven by higher staff costs from annual salary adjustments and volume-related compensation, as well as &ldquo continued investments in technology&rdquo .
Total allowances grew by 25 per cent to S$212 million for the quarter. This comprised S$94 million in allowances for impaired assets, lower than in the previous quarter and the year before.
It also included S$118 million in allowances for non-impaired assets, arising from changes in credit risk profiles and management overlays set aside amid heightened macroeconomic uncertainties.
Helen Wong, group chief executive officer at OCBC, said: &ldquo Looking ahead, the heightened uncertainties brought about by the shifts in trade policies and geopolitical risks are expected to have a dampening effect on overall economic growth in the region.&rdquo
It is also paying out 75c dividend for this qtr ....and is over 7% annually . DYODD
hokpin ( Date: 09-May-2025 07:10) Posted:
|
Yes. It performed best in better than expected category.
OCBC performed best compared to previous quarter.
DBS price will perform best coming months and years
Simply because it?s roe is highest
OCBC performed best compared to previous quarter.
DBS price will perform best coming months and years
Simply because it?s roe is highest
hokpin ( Date: 09-May-2025 07:10) Posted:
|
Read it. So DBS performs the best among the 3 banks? Today DBS should continue rally!
MrBear12 ( Date: 09-May-2025 07:03) Posted:
|
Slightly better than expected. By about 1 percent of net profits.
perhaps we may see a one percent increase in price today to about 1632
long term buy.
trade OCBC steadiness
perhaps we may see a one percent increase in price today to about 1632
long term buy.
trade OCBC steadiness
OCBC has reported a five percent decrease in net profits yoy
Qoq is up 12%
Qoq is up 12%
Here goes ... again ...
Delvyss ( Date: 30-Apr-2025 13:09) Posted:
|
Waiting for the day you bought the whole market
Delvyss ( Date: 30-Apr-2025 13:09) Posted:
|
jipped a tiny bit
OCBC-GEH saga: Could the insurer&rsquo s suspension be resolved through a selective capital reduction?
Many GEH minorities want their shares priced close to embedded value Sungei Bagan could be a means of speculating on an attractive deal
At OCBC&rsquo s annual general meeting on Apr 17, chairman Andrew Lee left no doubt that the banking group has been unmoved by calls for it to distribute its stake in Great Eastern Holdings (GEH) to its shareholders.
&ldquo (We) are not blinking,&rdquo he said, after reiterating OCBC&rsquo s longstanding position that its insurance unit is a significant source of earnings, and provides the group with a unique competitive advantage in the wealth management field.
Lee also defended OCBC&rsquo s miserly offer price of S$25.60 per share for GEH last year, saying it was based on work done by its investment bankers. &ldquo We paid millions for the advice,&rdquo Lee noted.
There is no point in continuing to argue about it, though. The more important question is how the impasse between OCBC and GEH can be resolved, and how investors should position themselves.
Lee refused to delve into this question at OCBC&rsquo s AGM. &ldquo It&rsquo s price sensitive,&rdquo he noted. &ldquo Great Eastern may be suspended, but OCBC is alive and kicking on the SGX &ndash the price moves on news.&rdquo
Yet, OCBC&rsquo s unwillingness to blink on its plainly-stated objective of keeping GEH in its fold, and its seeming aversion to paying much more than S$25.60 per share for the remaining stake in the insurer, could offer some clues on how things will eventually be sorted out.
Alternative path to delisting
Before going any further, some background might be useful.
OCBC&rsquo s offer for GEH last year at S$25.60 per share did not satisfy the two key conditions for a voluntary delisting. GEH&rsquo s independent financial adviser did not find the deal to be &ldquo fair and reasonable&rdquo and the offeror did not obtain an acceptance rate of at least 75 per cent.
GEH has been suspended from trading since July last year, because less than 10 per cent of its shares were left in the hands of the public. OCBC currently has an interest in 443.7 million GEH shares, representing a 93.75 per cent stake in the insurer.
As a public-listed company, GEH is expected to comply with the minimum free float rule. It has until May 25 to come up with a plan, assuming no further extensions of time are granted. GEH said on Mar 28 that it had appointed Merrill Lynch (Singapore) &ndash known as BofA Securities &ndash as a financial adviser to help explore various options.
On the face of it, the simplest solution would be for OCBC to make another offer for GEH. Yet, it seems unlikely that OCBC is prepared to pay a high enough price to win over GEH&rsquo s remaining minority investors.
OCBC&rsquo s offer last year was priced at a 30 per cent discount to GEH&rsquo s embedded value as at end-2023 of S$36.59 per share and it achieved an acceptance rate of only 46 per cent. GEH&rsquo s embedded value at end-2024 stood at S$38.08 per share.
What other options are available? One alternative I keep hearing about is for GEH to delist via a selective capital reduction exercise.
Under such a deal, GEH would cancel the shares held by its minority shareholders in exchange for a cash payment. OCBC would end up owning 100 per cent of the insurer, without having to make another offer.
Some investors have pointed out to me that it would be GEH&rsquo s board, rather than OCBC&rsquo s board, that would be responsible for leading a capital-reduction exercise, and ensuring that the insurer&rsquo s minority shareholders are adequately compensated.
Among Singapore-listed companies that have recently gone private via this route is Best World International.
A possible sticking point is that many GEH minorities want their shares to be priced at close to embedded value. Purchasing the nearly 29.6 million GEH shares that OCBC does not already own at S$38.08 each would cost nearly S$1.13 billion.
At end-2024, GEH held total assets worth more than S$113.9 billion, and shareholders&rsquo equity of S$8.69 billion.
Speculating on a deal
How can investors speculate on the possibility of a selective capital-reduction exercise at GEH with its shares currently suspended?
One option is to look at shares of Kuala Lumpur-listed Sungei Bagan Rubber Company &ndash which owns plantations, real estate and a pile of GEH shares.
Last year, Sungei Bagan acquired most of the assets and liabilities of another Kuala Lumpur-listed company, called Kuchai Development, in exchange for new shares. Kuchai subsequently distributed the Sungei Bagan shares it received to its own shareholders.
Among the assets Sungei Bagan acquired from Kuchai under the deal were more than 3.03 million GEH shares. Sungei Bagan already held more than 1.73 million GEH shares before the transaction. GEH&rsquo s latest annual report listed Sungei Bagan as its second-largest shareholder, with a holding of nearly 4.77 million shares &ndash representing a 1.01 per cent stake.
Sungei Bagan&rsquo s usually thinly traded shares ran up in May last year, as OCBC unveiled its offer for GEH at S$25.60 per share. They closed last week at RM5.64 &ndash putting Sungei Bagan&rsquo s market capitalisation at RM524.1 million, or about S$157.4 million.
Based on OCBC&rsquo s offer price of S$25.60, the GEH shares held by Sungei Bagan would be worth nearly S$122 million &ndash or 77.5 per cent of the company&rsquo s entire market capitalisation.
If its GEH stake were to be valued at its embedded value of S$38.08 per share, Sungei Bagan&rsquo s stake in the insurer would be worth nearly S$181.5 million &ndash or 15.3 per cent more than its current market capitalisation.
Investors should tread carefully, though. If there is no resolution to GEH&rsquo s trading suspension soon, Sungei Bagan could turn into a value trap.
Not likely drop more than 5 dollars like dbs.
huattuatua ( Date: 25-Apr-2025 09:54) Posted:
|
opening few mins very strong and after that its all the way down, now it drops more than the 57 cts div le,
uob monday xD, will it suffer the same fate as OC, lets watch on monday
uob monday xD, will it suffer the same fate as OC, lets watch on monday
huattuatua ( Date: 24-Apr-2025 15:29) Posted:
|
You are the most happy person tmr.
No points for guessing why
No points for guessing why
huattuatua ( Date: 24-Apr-2025 16:57) Posted:
|
luv ur humour
MrBear12 ( Date: 24-Apr-2025 15:50) Posted:
|
chances of 3 banks moving in tandem is likely, unless their result is otherwise